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Notice: Effective April 1, 2011, BCBSNC to require all Skilled Nursing Facilities (SNFs) to include Resource Utilization Groups (RUGs) on all claim forms

Clarification to announcement originally posted January 28, 2011: This policy applies to BCBSNC commercial lines of business including: Blue Care HMO, Blue Options PPO, Blue Options 1-2-3, Blue Options HSA, Blue Options HRA, Blue Options FC, and Blue Advantage.

In a move consistent with industry claim submission standards, Blue Cross and Blue Shield of North Carolina (BCBSNC) will begin requiring all Skilled Nursing Facility (SNF) providers to include Resource Utilization Groups (RUGs) on all inpatient claim forms, consistent with CMS requirements.

A RUG is a patient classification system for Skilled Nursing Facility patients and is three (3) alpha characters, plus a two (2) digit modifer that defines the level of care and determines the daily reimbursement rate.

On claims to BCBSNC these RUGs are represented as the first three positions of Health Insurance Prospective Payment System (HIPPS) codes. HIPPS codes are determined based on assessments made using the Minimum Data Set (MDS). Grouper software run at the SNF uses specific data elements from the MDS to assign beneficiaries to a RUG code. All SNFs should be using the MDS 3.0 assessment for admissions on or after October 1, 2010. The Grouper outputs the RUG code, which must be combined with the Assessment Indicator to create the HIPPS code. The RUG-HIPPS code is then entered on the claim in Form Locator 44.

For outpatient SNF claims, appropriate revenue codes must be placed in Form Locator 42 for each line item and must include CPT/HCPCS codes in Form Locator 44 to describe specific procedures, when and if, appropriate codes are available.

Skilled Nursing Facilities should note that the absence of an appropriate RUG code on a claim form could likely result in a rejected claim or affect processing time. This change will become effective April 1, 2011.